AIBU to think I'd like to retire at 55?

[Petals23]

I'm 45 now, been working in the same job as self employed since 19. I've been paying into pension since 25 and at the moment have about 120,000 pounds saved. Ideally I'd like to retire at 55. I'd appreciate anyone's view.

No children

Only retire that young if you have a plan for occupying your days. Tempting as it is, you could easily feel bored and unfulfilled. It's not like 55 is old.

Yay! All systems go!

YANBU for wanting to retire early. However it doesn’t sound that much to live on. I guess with no mortgage though, it may be doable. Definitely check it out with an IFA.

I’m also planning for early retirement. Can’t wait!

Depends a lot on your spending expectations. If you're planning lots of travel, eating out and expensive hobbies, obviously you'll need a lot more money saved than if you're happy to potter around locally, visiting free museums and doing the garden or other cheap pastimes.

Also what condition is your house in? If you might need roof, windows, kitchen or bathroom replacing, that's a big chunk out of your pot. But if they're all fairly new, you could in theory live with them for the rest of your life.

Of course if you're self-employed there's always the option of picking and choosing what jobs you take on, depending on what line of work you're in.

Choose to work a small number of hours every week, take longer breaks between projects or work seasonally, as appropriate.

Just out of sheer nosiness, what's everyone doing with their time when you retire age 55.

Assuming you're still physically and mentally capable have you got a sort of bucket list of things to do/experience?

I am retired now, about a year in and not quite 40 yet. I would that is not enough money yet, given age and average life expectancy.
Also do have a clear idea how you intend to use your early retirement.
I retired and became lost, going from working average 60/70 hours a week-to filch. I still have other investments and a great IFA, so things tick along with me needing to be involved as such.
My time is now spent, travelling a bit, appreciating the Arts, engaging a little on social media. And working on myself, to be happy about life in general. Retiring early doesn't necessarily mean happiness.

This may be a stupid question but How it where do you best find a financial advisor ? I need one to talk through various pension property things but whenever I start to look for one I get cold feet and have no way of knowing how to know who is reputable etc. Thanks for any help !

I'm 49 and have £55000 to my name. Mortgage free. I enjoy my job and don't want retire. God willing I will still be there till I'm 70. But wow, I feel so skint reading these threads.

I'm a lawyer and I've chosen a low-paying and rewarding field. I feel like a success. But I mean: a quarter of a million pounds?

I retired at 58. Never been busier! Dh still works which suits me fine. I do a lot of hiking, gym 4-5 times a week, lunches out. We have a short break every month in this country, a couple of city breaks in Europe and a main holiday.
My pension pot is about £750k at the moment. House is paid for. .we will probably downsize in 12-15 years.
Obviously everything is dependent on health and mobility.

I had a shit first marriage and so am relishing my second chance of happiness.

I want to slow travel, walk and climb all over Europe. Not just a 2 weeks rush

I think it sounds doable OP.

You’ve got 10 years for your current pension investments to compound- they could potentially double with compound interest. Plus the extra money that you save in the coming 10 years along with tax relief and employer contributions if it’s within your pension pot and the compounding due in that.

The £120k of savings you mention: are they all in cash accounts or stocks and shares? Best to have at least half of them in S&S or inflation means the value of the cash will reduce in time.

Good for you though OP. DH are planning something similar. If you’re on FB there’s a group called Financial Independence UK full of people aiming for early retirement and financial independence.

There’s a world full of hobbies and interests to fill our time so I’m always mystified when people ask what you’ll do with your time when you retire early. And I feel justified in saying that because I already have a lot more free time than most with my youngest child recently having started preschool every day and her napping a good chunk of the afternoons. I have a very long list of craft projects I really want to start, books to read, local museums and galleries to visit and walks and hikes to try...plus much more.

Yes, do it, if it will make you happy. Start living as cheaply as you can now, if you aren't already.
I'm planning to stop work at 55 which is later this year. I can't wait. Working makes me so unhappy.

Theres no way thats going to be enough. You could live another 30 years (or more) at age 55.
I mean, go for it if youre happy living on a very tight budget and scrimping on everything but I truly dont see the point of retiring that early if you then dont have the money to do anything fun.
That would defeat the entire object of retirement for me.

I know people who have tried it out, basically tried to live in their pension for six months to give them an idea.

I’m planning to go at 56/7. But I’ll still need to find something part time or casual to top up. But I want to travel and would rather do that sooner than waiting till I’m 65.

Yeah I think that's the risk in retiring early, I know a lot pf people who really struggled with the transition. It's the inactivity and not feeling important anymore.

Ignore the ones who are saying you won't have enough for now and try and find out for yourself. Live as cheaply as you can and record every penny of your spending for a few months. Boring but it will help you plan and give you an idea of what you can live on and whether early retirement is a realistic option. Don't forget to take into account the spending that is directly related to work, what you spend now on food/travel etc. and what, if anything, you might be spending more on instead eg heating. This is advice from a retirement planning workshop I attended a few years ago

Depends what you need to live on. With no children I assume you are not overly bothered about leaving assets behind? If not? Do you also own a house? You could use that equity as fall back in years to come if run out.

I could quite easily live on around £1200 a month with no major outgoings. Your pots by 55 should be able to cover that with the knowledge that state pension will kick in at 67/68.

It sounds feasible to me

OP i can't answer your financial question, but I've retired early and it's fantastic. All the people suggesting you might be bored and unfulfilled, I absolutely love the freedom retirement brings. We all spend so much time trying to squeeze everything into evenings, weekends and annual leave, it's fantastic to be free of all that. Go for it!

@Geoffrey
Totally agree. No watching daytime tv here...or even in the evening!

Thanks @Summergarden have requested to join that group.

that should give you a total saving/pension pot in excess of £500k which could get you £24k pa on drawdown plus state pension to kick in at 67.

Not sure where you get your figures from @Schoolchoicesucks but I think you are wrong. £24K on a pot of £500K? Nope. Our pension pot is more than twice that amount and yes, the annual income is more than £24K but your figures don't stack up, bearing in mind inflation for a start over the next 40 years.

I know people who have tried it out, basically tried to live in their pension for six months to give them an idea.

That will soon give you pause for thought, OP.

Have you considered that the state pension age will almost certainly increase again? My SPA just now is 67. I am 48. I have no doubt that it will be 70 by the time I retire.

In any event, state pension is miserly. I know that you have another ten years to save, so let’s say you end up with £500k. Annuities are terrible value, so assume you want to make the £500k last for the rest of your life (let’s say you live 30 years, post retirement, to 85; it will probably be longer).

Could you happily live on £16k a year (£500k /30) plus (if you have built up your full entitlement, and after age 68, or whatever your final SPA is) £8k of state pension? A chunk of that will be taxable. Will it fund the lifestyle you want? Even if you use up most of your £500k in the (say) 15 years before you get state pension?

I’ve gone through this thought process and I’ve decided to work until my late fifties: ten more years. I don’t want to drastically cut back on my lifestyle. My occupational pension, which will be worth having because it’s defined benefit, kicks in at state pension age. I don’t want to be wishing my sixties away to get my hands on the cash! Better to work longer and keep my brain sharp, in my view.

With some of the £120 000 savings , why don't you buy a property / properties on a BTL mortgage with interest only payments and save the rental profits?
Then sell them for a lump sum when you retire , hopefully at a profit ? Or buy one outright to boost your monthly pension ?